When you drive for Uber you are not an employee. You’re a contractor. When you’re not an employee, you have to be careful that your tax affairs are managed correctly. It is suggested for Uber drivers to use a tax agent.
Uber partners are independent contractors, so we do not withhold any taxes and partners are entirely responsible for their own tax obligations.
Do Uber drivers pay GST?
According to ATO, “If you have a ride-sourcing enterprise, fares you receive are subject to goods and services tax (GST).” It means all the Uber drivers are required to register for GST. This is in addition to the tax you need to pay for income you earn as a driver.
What you need to do
For GST you need:
- to get an ABN
- to register for GST from the day you start, regardless of how much you earn
- to pay GST on the full fare
- to lodge business activity statements (BAS) monthly or quarterly (you can’t choose to lodge annually)
- to know how to issue a tax invoice (you need to provide one for fares over $82.50 if asked)
For income tax you need to:
- include the income you earn in your income tax return
- only claim deductions related to transporting passengers for a fare, including apportioning expenses limited to the time you are providing a ride-sourcing service
- keep records of all your expenses and income
You must declare income from your ride-sourcing activities on your tax returns and lodge by the due date. You are required to lodge business activity statements (BAS) and pay any GST by the due date.
Please aware ATO obtains data from all ride-sourcing facilitators operating in Australia and their financial institutions to identify ride-sourcing drivers. This information allows us to help drivers understand their tax obligations including registration, lodgment, reporting and payment obligations.
If you have any enquiry, please contact our Business Mantra experts. You can call us on (08)9242 3555 or email us at info@businessmantra.com.au.
Source: ATO